How to make industry analysis actionable
Most companies have a framework or process in conducting an industry analysis. Typically, this involves some form of competitor analysis, key trends analysis, and maybe looking at some form of consumer or customer segmentation. There are plenty of frameworks for conducting these types of analysis – 4C’s, 5C’s, 4P’s, BCG matrix etc. Oftentimes, this is perceived an exercise to inform vs. to define strategic actions. How do organizations leverage this assessment in strategic choices?
Creation of Actionable Industry Analysis
Frame the right question. As simple as this sounds, this is the starting point in the strategic dialogue. Framing your question too narrowly risks being blind-sided. Framing your question too broadly leads to lots of extra information that clouds what’s truly happening. Engage key stakeholders in this dialogue before data collection and analysis. Importantly, make key members of the leadership team accountable for ensuring that the right strategic questions are being asked.
Assess the health of the industry in its current state. What’s been driving consumer or customer needs and purchase behavior? What are competitor’s current offerings and potentially new offerings? What disruptions have happened recently and what are those uncertainties where there’s conflicting information or opinions? Key disruptions are early signals of future uncertainties.
Paint a picture of where the industry is headed? Assess macro and micro trends, 5 or 10-year forecasts, identify new disruptions that could impact your industry during your planning horizon. A number of companies leverage scenario planning as a tool in this exercise.
Driving Action
Once the industry analysis is completed, how does one make this actionable?
Identifying opportunity and mitigating risk are obvious. Are there ways to quantify opportunities and risks to aid the decision making process? Are there selection criteria the team can use to rank these opportunities and risks? Having some form of quantification and aligned criteria enable teams to make data based, objective decisions. The next phase is to translate these opportunities and risks into choices. Some examples are highlighted below.
For companies that are operating globally, are there specific countries that are core to your business? Are there countries that have growth potential, however require investment? Are there countries that are challenging to compete in and require specific management attention? Are there countries that are currently white space and require additional knowledge prior to entry?
Are the specific consumer or customer segments that are white space to your core business within a country? Are the consumer segments across countries similar or does the need vary depending on the country?
Are there channels that are core to your business and/or new channels that require new investment? Given all the discussion on omni-channel environment, what are the implications for your business?
Are there specific price tiers that are core or white space for your business? And how is your industry evolving when it comes to price tiers and overall value proposition? Are your brands and products designed to offer relevant value propositions?
The answers to all these questions can be derived by the right industry analysis. As you embark into the 2016 strategic planning cycle, are you addressing any or all of these questions?
Y2S Consulting
Delivering insights to action